Estimating the Structure of Time Lags Between Wholesale and Farm Prices for Cottonseed

Previous analysis on annual wholesale marketing margins for cottonseed has indicated a need to establish the structure of short-period time lags between prices for cottonseed products and resulting farm prices for the gin-run seed. In particular, this would help assess large wholesale margins since the beginning of the 1972 crop year, when cottonseed oil and meal prices began an inflationary surge that has resulted in increases of over 100 percent.Objectives of this paper are: (1) to formulate and estimate the monthly, distribution of lagged response of cottonseed prices to changes in wholesale cottonseed product prices in the United States and (2) to use the estimation results in examining recent behavior of cottonseed prices and wholesale marketing margins.